Comments Kati Levoranta, CEO:
Rovio’s first quarter of 2020 was characterized by an improvement in profitability and operating cash flow. Group adjusted operating profit increased to EUR 13.0 million (7.5) or 19.6% margin (10.5) year-on-year. Operating cash flow increased to EUR 11.5 (3.3) million and was driven by the improved profitability. The group revenue was EUR 66.6 (70.9) million, which declined by 6.0% year-on-year.
The high operating profit of the quarter was driven by the low level of user acquisition and the stability of our key games, especially Angry Birds 2. We introduced a series of updates for Angry Birds 2, Angry Birds Dream Blast and Sugar Blast that were well received by the players. As a result, the performance of these games improved gradually during the quarter.
In the beginning of the first quarter we scaled down user acquisition to meet our payback targets and the daily user acquisition investments were quite stable throughout the quarter. Now as we have entered the second quarter, the user acquisition has continued at a similar level. We are ready to invest more in user acquisition when we see an opportunity in the market, improvement in live games performance and when we launch new games.
Brand Licensing performed in line with our expectations: revenue was lower year-on-year while being profitable. The highlight for the Brand Licensing in the quarter was the announcement of a new long-form Angry Birds animation series with Netflix, scheduled to be released in 2021.
During the first quarter, several new game concepts were added to the early phase of our roadmap. Additionally, we had new games entering the marketability test. These are part of our continuous effort to build and maintain a healthy game pipeline - a key enabler for long-term growth. We are also happy to announce the launch of our next game, Small Town Murders, which is scheduled for launch in June 2020. The game is a new IP puzzle game embedded in a narrative of mysteries.
Rovio has taken the Covid-19 and the impact it has had on individuals and society very seriously. It has been our top priority to minimize the risk of the pandemic to our employees and to our business. On March 12th, we instructed everyone at Rovio to work from home until further notice to safeguard the health of our employees and business continuity. Nevertheless, we have continued during this time to hire new talent to strengthen our competence
In our games, we have seen an increase in the number of downloads as well as user engagement and also some uptick in revenues in March and April. However, it is too early to quantify and distinguish the impact of the corona pandemic and game improvements.
We are grateful for all Rovians for the fast transformation to “working from home -mode” and the continued positive spirit during these challenging times.
Read the full Q1 Interim report here.